Deposit Bonds
There are times when you may not have cash immediately available for a deposit on a purchase, or you may want to leave your cash invested up until the day of settlement. In such instances, a Deposit Bond may be the ideal solution.
What is a Deposit Bond?
A Deposit Bond acts as a substitute for a cash deposit between exchange of contracts and settlement. It is a guarantee to the vendor (person selling the property) that you will have the deposit funds available at the time of settlement. Deposit Bonds work like an insurance document, so that in the event that you are unable to pay the purchase costs, the vendor is able to recover the funds from the Bond provider.
Deposit Bonds may be issued for all or part of a deposit amount, usually up to 10% of the purchase price.
More Information on Deposit Bonds
Be aware that if you default on the purchase costs, the Bond provider will recover the funds from you. For more information on Deposit Bonds or to talk to a mortgage broker about home loan options that are in your best interest, call us on 13 LOAN (or +61 2 9249 3739for international callers) or email us the form on this page and we will return your contact within 2 business hours.
Why use a Deposit Bond?
You may consider using a Deposit Bond in the following scenarios:
- If you would prefer to leave your savings invested and earning interest until the time of settlement
- Your deposit funds are tied up as equity in another property
- You want to avoid the of arranging bridging finance
- You are waiting for funds to clear from another source
- You are going to auction and are unsure about whether you will be successful
More information or help
For confidential assistance with your home loan or to talk to your local mortgage broker, call us at any time on 13 LOAN or call our direct line on +61 2 9249 3739.
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